Forbes' D'Vorkin's 11 Observations about the New Business

I don't always agree with what Lewis D'Vorkin writes in his column about the confluence of media and journalism in the digital age, but he's always worth reading. Sometimes his column is all #humblebrag about how smart Forbes is -- actually, based on a very unscientific survey, most of his columns are humblebrags. 

But his current column, "Inside Forbes: 11 Realities And Observations About The News Business, Like Them Or Not," is definitely worth reading for the following observations. (I'm not going to repeat all 11 items -- go read the column for yourself -- I'm just pointing out those I find most significant, and including some of my observations based on D'Vorkin's.)

1. Content needs to be mobile-friendly and easy to consume -- but much of it is not. One problem is that when you click on a website on your mobile, often you'll get a pop-up ad (Forbes does this to, by the way) that you can't exit from because the form factor doesn't let you scroll easily to find the X. That's annoying and a problem.
2. Ad-blocking software will get more popular -- a trend we didn't really address for 2016, but I tend to agree. The rise of ad-blocking will hurt online ad revenue that media properties can generate and depend on -- this is will lead to lower revenues, layoffs, and more media properties being shut down. Oh, and higher subscription fees for those media outlets that have a paywall.
3. Facebook is not just a social network. It is a media play, and other sites' traffic rates are declining because people check out the headlines and comments on Facebook without clicking through. Again, that will affect online ad rates.
4.  Lest you think Facebook is unstoppable, it is facing stiff competition from messaging apps like Kik, Snapchat and Whatsapp.
5. A lot of the media sites (and quasi-media/e-commerce sites like Refinery29) that are doing well are targeting women. That says something for companies looking to target customers.
6. Death of Page Views -- which even D'Vorkin admits has been a prediction that people have made for years now. But this time, it's different because there are new data and engagement possible via mobile.

Anyway check out his article.

Are All Content Producers "Internet Slaves"? -- Why Can't We Place A Value of Online Content?

In a compelling op-ed published in the New York Times entitled, "Slaves of the Internet, Unite!" Tim Kreider, an author of “We Learn Nothing,” a collection of essays and cartoons, makes the case that once artists became known as "content providers," they were "essentially extinct."

The situation for writers is that: 

"People who would consider it a bizarre breach of conduct to expect anyone to give them a haircut or a can of soda at no cost will ask you, with a straight face and a clear conscience, whether you wouldn’t be willing to write an essay or draw an illustration for them for nothing."

What has lead us to this point?

"Just as the atom bomb was the weapon that was supposed to render war obsolete, the Internet seems like capitalism’s ultimate feat of self-destructive genius, an economic doomsday device rendering it impossible for anyone to ever make a profit off anything again. It’s especially hopeless for those whose work is easily digitized and accessed free of charge." 

It's interesting that this op-ed follows an article from the previous Sunday's New York Times that talked about difficult clients, among the warning signs are “Whenever someone tells me, ‘I dabble in writing myself’ or ‘This just needs some polishing up’ alarm bells start ringing. Why? Someone who ‘dabbles in writing’ thinks they could do a great job themselves and they’ll micromanage you or worse, not pay what you’re worth."

For writers and those PR agencies and departments that hire writers, including companies looking to become thought leaders by regularly publishing fresh content, this question about the value of writing is not going to go away.

A decade or so ago, you could develop a marketing brochure in January and you could use it all year, possibly longer than that. But these days, you can't get away with the same brochure and content throughout the year. You need to regularly refresh and update your blog, Twitter feed, Facebook page, LinkedIn group, etc. That means there is a value to producing new content but the point that Kreider and others make is that no one seems willing to pay an appropriate amount for it. After all, blogs, like this one, are designed to give away content while many newspapers and magazines also make their content available for free, whether you're a subscriber or not.

I don't see the situation changing but here are some questions to consider:

• Why does the content-consumer public feel they don't need to pay for the content they're consumer (unless it's on Netflix)?
• There's always going to be someone willing to take a job for "the exposure" so how can established writers compete?
• Companies may be able to afford to give away content but what can artists do to better support themselves -- including the freelancers who find they can no longer afford to write -- which could leave companies scrambling to find new content providers?
• If companies can't point to specific sales generated by the content they produce to entice customers, how can they place a value on that content?
• Can the model of free content be sustainable? Should it?
• Should companies continue to give away their content?
• Aside from page views, how can we provide an estimate of the value of our content?
• How can freelancers and companies alike monetize their content?

That last question may be connected to my last two blog posts, "Why are Pogue, Mossberg & Swisher Leaving the NYT & WSJ?" and "Why Pogue, Mossberg & Swisher Are Leaving the NYT & WSJ, Part II."

Seems like even top reporters (aka "content producers") are looking for new opportunities because they can't make the money the old fashioned way. I don't think this problem is one that affects only writers and artists. It affects not just media companies but any company that produces content.

Understanding BusinessWeek

BusinessWeek, which seems to be overpaying on the rent it pays to parent McGraw-Hill (to the tune of $26 million in charges like overhead and rent, according to the Times), is facing significant challenges. As the deadline for a possible bid approaches, I thought it worthwhile to provide some context to BusinessWeek, some of it gleaned from a New York Times article, "BusinessWeek, on the Block and Ailing."

• BusinessWeek founding missions was to summarize the week’s business news. It soon became a handbook for managers, covering strategy, marketing and the big issues affecting business, like policy, energy and debt.
• In Feb. 2009, BusinessWeek updated its mission: to focus on what executives needed to know for their jobs -- business leaders, and not consumers. In so doing, the magazine droped "sports, lifestyle and politics articles." According to a mission statement unveiled then, “Our mission is to move business forward....(and to help readers) make smarter decisions in their businesses, careers and investments.”
• However, to succeed,“They have to be unique, must-read,” Stephen B. Shepard, who had served as editor of BusinessWeek for 20 years and is now dean of the Graduate School of Journalism at the City University of New York.

That's just from a journalism perspective.

From a business perspective, BusinessWeek is losing money, even without the overpayment to McGraw-Hill.

According to the Times, ad revenue for BusinessWeek dropped to "an estimated $60 million this year, from almost $110 million in 2006." Meanwhile, its website has been doing very well in generating traffic, yet web-based ad revenue increased by less than a million to an estimated $20.5 million this year.

To understand the gap between web traffic and web revenues, it's important to understand this:
45 percent of pages views of BusinessWeek.com are from slide shows. Apparently, slide shows are considered to be gimmicky. (That may be, but as I wrote earlier today, Using The Power of Multimedia to Make a Point -- Will this be the new journalism?, such gimmicks actually take advantage of the Internet so perhaps that mindset will change.)

In fact, only 16 percent of page views came from original articles, and BusinessWeek.com pulls in just $19.28 per thousand ad views, almost a quarter lower than what it was earning three years ago. And it sells only about 38 percent of the available ads, down from 79 percent in 2006, according to a document cited by the Times.

What this means is that, despite six companies interested in bidding on BusinessWeek, its long-term prospects are not great. BusinessWeek seems to have fixed its journalism model, but it still needs to solve its business model.